A transaction that does not cause an inﬂow or outﬂow of cash should be reported on the statement of cash ﬂows only if it is an adjustment to convert accrual proﬁt to the cash basis.

Question

Quizplus · Accepted Answer

A transaction that does not cause an inflow or outflow of cash should not be reported on the statement of cash flows, even if it is an adjustment for accrual accounting. The statement of cash flows only reports cash inflows and outflows.

A Transaction That Does Not Cause an Inﬂow or Outﬂow